Oil prices rise as tensions flare in Yemen, peace hopes dented in Ukraine

Oil prices rose by more than $1 on Monday as traders braced for potential supply disruptions in the Middle East due to rising tensions in Yemen, and Russia accused Ukraine of launching a drone attack on its President Vladimir Putin's residence.

Brent crude futures rose $1, or 1.7%, to $61.64 a barrel by 1:18 p.m. ET (1818 GMT), while U.S. West Texas Intermediate crude was up $1.10, or 1.9%, at $57.84.

"The market's focus has shifted toward the Middle East, where fresh instability, including Saudi air strikes in Yemen, is keeping supply-disruption headlines in play," Gelber & Associates said in a note.

Yemen's Saudi-led coalition said any military moves by the main southern separatist group in the eastern province of Hadramout that undermined de-escalation efforts would be countered to protect civilians, the Saudi state news agency reported on Saturday.

An escalation of fighting on Thursday killed two people from the separatist group Southern Transitional Council's Hadhrami Elite Forces in Hadramout, the group said in its statement. Saudi airstrikes followed early on Friday, targeting the STC forces in the area, a source told Reuters.